Tax practice

The Internal Revenue Service is not doing enough to match incorrect or missing identification numbers on income and wage statements with existing tax accounts, potentially costing the U.S. Treasury billions in lost revenue, charged a Treasury Department watchdog.

Computer Sciences Corp. said it would restate its fiscal 2007 results after examining the impact of FASB Interpretation No. 48, or FIN 48, and discovering accounting errors for fiscal 1997 through 2007.

Of the roughly one hundred thousand cases a year that go before the Internal Revenue Service Appeals Division, more than 80 percent get resolved without going to litigation. That by itself is a good reason for tax professionals to utilize the appeals process, according to Sarah Ingram, chief at the IRS Appeals unit."We see large taxpayers, small taxpayers, individuals. We see large-dollar figures, any topic under the sun," she said. "Almost half of those cases come from the Collection Division, including either collection due process or offers-in-compromise kinds of activities."

IRS APPOINTS NEW COMMISSIONER

With the Tax Code constantly in a state of flux with new tax laws, not to mention delayed effective dates on tax provisions, sunsetting provisions, and phase-ins and phase-outs, every year offers some new wrinkles for tax professionals to worry about.The 2007 tax year is no exception.

The Senate Finance Committee continued its examination of whether to raise taxes on the earnings of managers of private equity firms and hedge funds by looking at the impact of carried interest taxation on pension funds.

The House Ways and Means Committee held hearings on proposals to raise taxes on managers of private equity firms and hedge funds, and to combat the expanding impact of the alternative minimum tax, as well as listening to testimony about the impact of the Bush tax cuts.

Relatively few taxpayers are making use of the Advanced Earned Income Tax Credit, but many of those who do receive the AEITC do not comply with the requirements of the program, according to a government report.

President Bush made several proposals late last week to relieve homeowners from the burden of the imploding mortgage market, just in time to grab Congress's attention as it returns this week from summer recess.

The federal government is itself a tax delinquent, owing approximately $45 million in employment taxes, according to a report from a Treasury Department watchdog.

House Ways and Means Committee Chairman Charles Rangel, D-N.Y., plans to hold a hearing on fairness and equity in the Tax Code.

Two high-ranking senators are calling for the Government Accountability Office to investigate the growing problem of tax fraud related to identity theft and how it contributes to the tax gap.

The Internal Revenue Service introduced a Voluntary Closing Agreement Program that will help financial firms avoid harsh penalties for violating federal tax laws on arbitrage investment restrictions for municipal bonds.

The Internal Revenue Service appointed four people to high-ranking positions at the agency.

Rep. John Dingell, D-Mich., said he plans to issue a proposal when Congress returns from recess that would impose stiff new taxes on gasoline and end the mortgage interest tax deduction on "McMansions," or homes greater than 3,000 square feet, as a way to discourage over-consumption of fuel.

The Internal Revenue Service has problems with its tax return preparation assistance, but still offers helpful advice with tax laws, said a report issued by a Treasury Department watchdog group.

Sen. Charles Schumer, D-N.Y., has written letters to the Big Four accounting firms asking what they are doing to let their financial institution clients know about waivers on mortgage accounting standards that could let borrowers refinance their loans.

The Internal Revenue Service is encouraging more midsized companies to file their corporate returns electronically as the Sept. 17 deadline approaches for calendar-year filers who asked for extensions.

More than 8 million people file tax returns each year who don’t need to do so, imposing heavy costs on the Internal Revenue Service, according to a new report from a Treasury Department watchdog.

Tax information publisher BNA introduced the BNA Tax and Accounting Center, an online service that unites all of the company’s tax and accounting information in one place.